But the project is as controversial as his program to escape charges of corruption, obtain immunity against prosecution, muzzle the opposition and reshape the judiciary that indicted him.

Saving Venice and saving Berlusconi's government may have become synonymous in an Italy split between those who see the billionaire leader as the economic guru leading the country to new riches and those who see him as a dictator in the making.

Amid a massive naval blockade around the ceremony in St. Elena, a fleet of private boats on the lagoon carried protesters demonstrating against Berlusconi and a dike that many critics and experts have labeled "obsolete" and "ruinous" for the city's delicate ecosystem.

The Venice dike project, to be completed by 2011 and known as "Moses," has been on the drawing board for 20 years. Skeptics believe it has been superseded by more modern methods and say it may never be completed and may never function properly.

Italy's wealthiest man and Europe's most powerful media baron, Berlusconi has been battling for weeks to restore public confidence in his integrity and his coalition government. Casting himself in the role of a man of action, he embraced both an ongoing bridge project across the Messina Strait connecting Sicily to the mainland and the Venice dike system.

Last month his closest collaborator, Cesare Previti, was sentenced to 10 years in prison for corruption that benefited Berlusconi's Fininvest holding company.

This month, Berlusconi had to attend a trial to face bribery charges in obtaining ownership of the state-owned food company SME in the 1980s, becoming the first sitting premier to testify as a criminal defendant.

Backed by an Italian media he virtually owns or controls, Berlusconi has launched acrimonious attacks against the judiciary that indicted him and has vilified or sued his critics. He contends that all his opponents, including the magistrates who investigated his bribery case, are part of a left-wing conspiracy to bring down his right-wing coalition government.

Known for his autocratic ways and gaffes, Berlusconi only added fuel to the fire when, as he emerged from his trial one day in Milan, a young bystander called him a "buffoon" and added, "You'll end up like Ceausescu," the Romanian dictator executed in 1989.

When the state-run RAI-3 TV network, renowned as the last objective television station in Italy, aired the episode--the only station to do so--it was invaded for three days by government inspectors. Their official task was to investigate Berlusconi's now-discredited claim that the buffoon episode was staged by the network.

Undaunted by angry reaction to the incursion of the state-run station, Berlusconi this week pledged to go ahead with the defamation case against the youth and to sue "anyone who offends the premiership."

Berlusconi is already suing The Economist, a British weekly. Before he was elected, the publication called him "unfit" to lead Italy. This month, it argued that because of his legal problems and unresolved conflicts of interest, he lacked the "moral authority" to take over the European leadership.

Taking the EU helm

On July 1, Berlusconi as Italy's prime minister assumes the presidency of the European Union, an office that rotates among the 15 member states every six months.

Berlusconi will come into office at a particularly sensitive time, as the EU tries to mend relations with the United States after sharp differences over the Iraq war. So a verdict that cuts against him could prove embarrassing for the EU. His lawyers, however, are working hard to prolong the proceedings into next year, when the presidency will pass out of Italy's hands.

Opponents of the methods of the Italian leader, however, are most incensed by his proposal to reintroduce a parliamentary immunity system discarded in 1993. The lifting of immunity allowed Italy's "clean hands" magistrates to indict crooked politicians, a campaign that led to the collapse of the Christian Democrat and Socialist parties.

Right-wing politicians had clamored for the suspension of immunity for parliamentarians in 1993. The same politicians, now in government, are demanding its reintroduction. The return of immunity from prosecution will virtually place on hold all court cases against Berlusconi while he holds political office.